Notes 1 through 5 please refer to the Notes to the Financial Highlights set forth at the end of this release.

Total Energy's results for the three months ended March 31, 2014 reflect increased drilling activity in Western Canada and continued growth in the Company's Compression and Process Services division.

Total Energy's Contract Drilling Services division achieved 70% utilization during the first quarter of 2014, recording 1,015 operating days (spud to release), compared to 908 operating days, or 63% utilization, during the first quarter of 2013 with a fleet of 16 rigs during both periods. Revenue per operating day increased 4% for the first quarter of 2014 relative to the prior year comparable period due primarily to higher average pricing. The Rentals and Transportation Services division achieved a utilization rate on major rental equipment of 51% during the first quarter of 2014 as compared to a 50% utilization rate during the first quarter of 2013. This division exited the first quarter of 2014 with 9,900 pieces of rental equipment and 109 heavy trucks as compared to 9,900 rental pieces and 106 heavy trucks at March 31, 2013. The Compression and Process Services division generated revenues of $54.7 million for the three months ended March 31, 2014 compared to $45.1 million for the same period in 2013, an increase of 21%. This division exited the first quarter of 2014 with a $49.0 million backlog of fabrication sales orders as compared to $49.2 million at March 31, 2013. During the first quarter of 2014 approximately 10,500 horsepower of rental compression was sold upon the exercise of purchase options. As at March 31, 2014 there was 51,400 horsepower of compression equipment on rent as compared to 30,000 horsepower on rent at March 31, 2013. The gas compression rental fleet operated at an average utilization rate of 91% for the first quarter of 2014 as compared to 86% during the first quarter of 2013.

Cashflow was $34.0 million for the three months ended March 31, 2014, as compared to $12.4 million for the comparable period in 2013. This significant increase in cashflow was due primarily to the fact that $15.3 million of income taxes paid in the first quarter of 2013 related to 2012 taxable income.

During the first quarter, Total Energy declared a quarterly dividend of $0.06 per share to shareholders of record on March 27, 2014. This dividend was paid on April 30, 2014. 35,400 common shares were purchased under the Company's normal course issuer bid during the first three months of 2014 at an average price of $20.12 per share (including commissions).

Outlook

Relatively strong drilling activity in Western Canada during the first quarter was underpinned by continued strength of oil prices and substantially higher natural gas prices. Current expectations are that drilling activity levels will remain strong following spring break-up when road conditions improve and permit the transportation of heavy equipment. While completion activity started out somewhat sluggish in 2014, such activity picked up significantly in mid-February and continued through into April. Current indications are that summer completion activity will be higher than 2013, which is expected to positively impact the Company's Rentals and Transportation Services division which has suffered over the past several quarters due to unfavorable market conditions arising from lower well completion and service rig activity. The Company's Compression and Process Services division continues to see strong demand for its products and services.

Total Energy's financial condition remains solid with a long-term debt (including convertible debentures) to long-term debt plus equity ratio of 0.16 to 1.0, $92.6 million of positive working capital and no net debt as at March 31, 2014. Total Energy's $35 million operating facility is currently fully available and undrawn.

Total Energy's 2014 capital expenditure budget is currently $54.0 million, including $22.8 million of carry forward from 2013, of which $21.1 million has been expended to March 31, 2014. Included in capital expenditures are $1.2 million of capital leases related to light duty vehicles. Total Energy has increased its 2014 capital budget by $14.0 million to $68.0 million. Included in this increase is $9.5 million for the addition of approximately 185 pieces of rental equipment and $4.5 million for the construction of infrastructure to support the continued growth of the Compression and Process Services division's field services business in central and northwestern Alberta. Total Energy continues to evaluate numerous investment opportunities and the Company's balance sheet strength provides significant capacity and flexibility to pursue further growth opportunities that meet the Company's investment expectations.

Conference Call

At 2:30 p.m. MST today, Total Energy will conduct a conference call and webcast to discuss its first quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. The call is open to Shareholders and all other interested persons. A live webcast of the conference call will be accessible on Total's website at www.totalenergy.ca by selecting "Webcasts". Persons wishing to join the conference call live may do so by calling (800) 766-6630 or (416) 340-8530. Those who are unable to listen to the call live may listen to a recording of it on Total Energy's website. A recording of the conference call will also be available until May 19, 2014 by dialing (800) 408-3053 (passcode 2307440).

Annual Meeting of Shareholders

Shareholders and other interested persons are invited to attend the annual meeting of Shareholders which will commence at 10:00 a.m. (Calgary time) on Thursday May 22, 2014 at the Calgary Petroleum Club, 319 - 5th Avenue S.W., Calgary, Alberta.

Selected Financial Information

Selected financial information relating to the three month period ended March 31, 2014 and 2013 is attached to this news release. This information should be read in conjunction with the condensed unaudited interim consolidated financial statements of Total Energy and the attached notes to the consolidated financial statements and management's discussion and analysis to be issued in due course and reproduced in the Company's first quarter report.

Condensed Interim Consolidated Statements of Financial Position

(in thousands of Canadian dollars)

March 31,

December 31,

2014

2013

(unaudited

)

(audited

)

Assets

Current assets:

Cash and cash equivalents

$ 4,398

$ 3,210

Accounts receivable

102,596

78,130

Inventory

39,597

38,858

Income taxes receivable

3,231

2,402

Prepaid expenses and deposits

4,573

5,921

154,395

128,521

Property, plant and equipment

384,038

382,347

Other assets

7,848

3,861

Goodwill

4,053

4,053

$ 550,334

$ 518,782

Liabilities & Shareholders' Equity

Current liabilities:

Accounts payable and accrued liabilities

$ 51,961

$ 46,224

Deferred revenue

5,603

8,710

Dividends payable

1,877

1,559

Current portion of obligations under finance leases

2,383

2,377

61,824

58,870

Obligations under finance leases

3,078

2,775

Convertible debentures

64,904

64,446

Deferred tax liability

59,594

52,079

Shareholders' equity:

Share capital

84,485

83,243

Contributed surplus

6,978

6,677

Equity portion of convertible debenture

4,601

4,601

Retained earnings

264,870

246,091

360,934

340,612

$ 550,334

$ 518,782

Condensed Interim Consolidated Statements of Comprehensive Income

(in thousands of Canadian dollars except per share amounts)

Three months ended
March 31

2014

2013

(unaudited

)

(unaudited

)

Revenue

$ 115,113

$ 102,911

Cost of services

72,693

62,755

Selling, general and administration

8,448

8,377

Share-based compensation

690

1,133

Depreciation

7,622

7,168

Results from operating activities

25,660

23,478

Gain on sale of property, plant and equipment

2,397

931

Finance income

1,159

142

Finance costs

(1,502

)

(1,429

)

Net income before income taxes

27,714

23,122

Current income tax (recovery) expense

(829

)

2,604

Deferred income tax expense

7,515

3,127

Total income tax expense

6,686

5,731

Net income and total comprehensive income for the period

$ 21,028

$ 17,391

Earnings per share

Basic earnings per share

$0.67

$ 0.57

Diluted earnings per share

$0.63

$ 0.54

Condensed Interim Consolidated Statements of Cash Flows

(in thousands of Canadian dollars)

Three months ended
March 31

2014

2013

(unaudited

)

(unaudited

)

Cash provided by (used in):

Operations:

Net income for the period

$ 21,028

$ 17,391

Add (deduct) items not affecting cash:

Depreciation

7,622

7,168

Share-based compensation

690

1,133

Gain on sale of property, plant and equipment

(2,397

)

(931

)

Finance income, unrealised gain

(1,108

)

(142

)

Finance costs

1,502

1, 429

Current income tax (recovery) expense

(829

)

2,604

Deferred income tax expense

7,515

3,127

Income taxes paid

-

(19,425

)

34,023

12,354

Changes in non-cash working capital items:

Accounts receivable

(24,466

)

(33,209

)

Inventory

(739

)

3,222

Prepaid expenses and deposits

1,348

(1,704

)

Accounts payable and accrued liabilities

7,292

7,648

Deferred revenue

(3,107

)

(1,868

)

14,351

(13,557

)

Investments:

Purchase of property, plant and equipment

(19,908

)

(6,416

)

Acquisition of business

-

(16,954

)

Purchase of other assets

(2,879

)

-

Proceeds on disposal of property, plant and equipment

12,925

3,217

Changes in non-cash working capital items

718

(4,259

)

(9,144

)

(24,412

)

Financing:

Repayment of obligations under finance leases

(890

)

(785

)

Dividends to shareholders

(1,559

)

(1,530

)

Issuance of common shares

1,193

1,112

Repurchase of common shares

(712

)

(1,155

)

Interest paid

(2,051

)

(2,016

)

(4,019

)

(4,374

)

Change in cash and cash equivalents

1,188

(42,343

)

Cash and cash equivalents, beginning of period

3,210

50,052

Cash and cash equivalents, end of period

$ 4,398

$ 7,709

Segmented Information

The Company operates in three main industry segments, which are substantially in one geographic segment. These segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labour required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in drilling, completion and production operations and Compression and Process Services, which includes the fabrication, sale, rental and servicing of natural gas compression and process equipment.

As at and for the three months ended March 31, 2014 (unaudited)

Contract

Rentals and

Compression

Drilling

Transportation

and Process

Services

Services

Services

Other(1

)

Total

Revenue

$ 21,741

$ 38,628

$ 54,744

$ -

$ 115,113

Cost of services

11,570

18,118

43,005

-

72,693

Selling, general and administration

1,018

3,802

2,378

1,250

8,448

Share-based compensation

-

-

-

690

690

Depreciation

1,866

3,824

1,932

-

7,622

Results from operating activities

7,287

12,884

7,429

(1,940

)

25,660

Gain on sale of property, plant and equipment

20

44

2,260

73

2,397

Finance income

-

-

-

1,159

1,159

Finance costs

(203

)

(522

)

(252

)

(525

)

(1,502

)

Net income (loss) before income taxes

7,104

12,406

9,437

(1,233

)

27,714

Goodwill

-

2,514

1,539

-

4,053

Total assets

116,158

251,252

170,590

12,334

550,334

Total liabilities

25,088

55,878

39,035

69,399

189,400

Capital expenditures

$ 8,319

$ 3,495

$ 7,238

$ 856

$ 19,908

As at and for the three months ended March 31, 2013 (unaudited)

As at and for the three months ended
March 31, 2013

Contract
Drilling
Services

Rentals and
Transportation
Services

Compression
and Process
Services

Other(1

)

Total

Revenue

$ 18,630

$ 39,201

$ 45,080

$ -

$ 102,911

Cost of services

10,767

15,973

36,015

-

62,755

Selling, general and administration

914

3,897

2,106

1,460

8,377

Share-based compensation

-

-

-

1,133

1,133

Depreciation

1,798

3,861

1,271

238

7,168

Results from operating activities

5,151

15,470

5,688

(2,831

)

23,478

Gain (loss) on sale of property, plant and equipment

(32

)

165

798

-

931

Finance income

-

-

53

89

142

Finance costs

(201

)

(548

)

(233

)

(447

)

(1,429

)

Net income (loss) before income taxes

4,918

15,087

6,306

(3,189

)

23,122

Goodwill

-

2,514

1,539

-

4,053

Total assets

104,741

243,837

129,117

4,355

482,050

Total liabilities

18,919

48,213

25,583

66,322

159,037

Capital expenditures (2)

$ 1,259

$ 3,477

$ 15,671

$ 9

$ 20,416

(1)

Other includes the Company's corporate activities, accretion of convertible debentures and obligations pursuant to long-term credit facilities.

(2)

Includes January 1, 2013 acquisition of a process equipment fabrication business included in Compression and Process Services segment.

Total Energy Services Inc. is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression and process equipment. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.

Notes to Financial Highlights

Operating earnings means results from operating activities and is equal to net income before income taxes minus gain on sale of property, plant and equipment plus finance costs minus finance income. EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income before income taxes plus finance costs plus depreciation less finance income. Cashflow means cash provided by operations before changes in non-cash working capital items. Operating earnings, EBITDA and cashflow are not recognized measures under IFRS. Management believes that in addition to net income, operating earnings, EBITDA and cashflow are useful supplemental measures as they provide an indication of the results generated by the Company's primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company's primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that operating earnings, EBITDA and cashflow should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy's performance. Total Energy's method of calculating operating earnings, EBITDA and cashflow may differ from other organizations and, accordingly, operating earnings, EBITDA and cashflow may not be comparable to measures used by other organizations.

Per share data (diluted) and the number of common shares outstanding on a diluted basis includes the impact of the approximate 3.1 million common shares issuable upon the entire conversion of the $69 million principal amount of convertible debentures issued by the Company in February 2011.

Cashflow for the three months ended March 31, 2013 is net of $15.3 million of income taxes paid during the period that relates to 2012 taxable income as a result of the Company not having been required to make income tax installment payments during 2012.

Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, the demand for products and services provided by Total Energy, Total Energy's ability to attract and retain key personnel and other factors. Reference should be made to Total Energy's most recently filed Annual Information Form and other public disclosures (available at www.sedar.com) for a discussion of such risks and uncertainties.